Bakrie seeks court bankruptcy protection
Bakrie seeks court bankruptcy protection
JAKARTA (JP): Publicly listed business group PT Bakrie &
Brothers said on Wednesday that it had appealed for court
protection from the creditors of its US$1.08 billion debt.
The company's spokesman Lalu Mara Satria Wangsa said that the
company had no choice but to ask for court protection because
some of the creditors still refused the company's debt
restructuring proposal.
With court protection, the widely diversified business group
would be allowed to suspend debt payments and to negotiate the
debt restructuring proposal under court supervision, he said.
"With this mechanism, Bakrie will be protected from bankruptcy
litigation, and in addition, it will also have the chance to
push the creditors who refuse the company's debt restructuring
proposal to accept the deal," he told The Jakarta Post.
Bakrie started debt restructuring negotiations with its
creditors (mostly foreign institutions) in 1998, but has never
reached 100 percent creditor approval in order put the debt
restructuring deal into effect.
According to the 1998 Bankruptcy Law, the debt restructuring
of a company can take place if 50 percent plus one of the total
number of the creditors approve the debt restructuring proposal.
The above approval must represent at least two-thirds of the
value of the debtor's outstanding debts.
But failure to get the majority vote, as stipulated under the
Bankruptcy Law, would cause Bakrie Brothers to be automatically
declared bankrupt.
Mara said that 76 percent of Bakrie's more than 150 creditors,
had agreed with the company's debt to equity and asset swap
scheme.
Ninety percent of the holding company's debts are foreign
debts, with the remaining 10 percent comprising debts from local
banks including debt transferred to the Indonesian Bank
Restructuring Agency (IBRA).
The group's creditors include Amex Singapore, Cariploe
Singapore, Chase Manhattan Singapore, Deutsche Bank, Dresdner
Ltd, IBJ Leasing, Hitochu Corp, The Law Debenture Trust and
Westdeutsche Landes Bank Girozentrale.(bkm)